Duracell Q4 Sales, Profit Jump

2/03/2005 09:50:00 AM Eastern

By: By Jeff Malester

Boston — Reflecting global growth, driven by a double-digit percentage increase in advertising for new and established batteries, Duracell net sales in the fourth quarter climbed 12 percent, hitting $770 million, up from $685 million in the year-ago period.

Profit from operations for Duracell batteries rose 21 percent in the fourth quarter, ended Dec. 31, reaching $63 million, up 21 percent from the $52 million generated the same quarter in 2003.

Duracell, the battery division of Gillette, claimed “an exceptional year” for its battery business, “within a very difficult competitive environment,” said Gillette. “The overall impact of all our effort is clear,” said James Kilts, chairman/CEO, “an exceptional year of both top-line and bottom-line growth.”

If the $57 billion sale of Gillette to Procter & Gamble, announced late last month, is approved, the Duracell brand will join P&G’s diversified stable of consumer products.

Duracell net sales for the 12 months jumped 11 percent to $2.2 billion from $2 billion, while profit from operations soared 41 percent to $490 million from $348 million. The profit surge was attributed to gains from manufacturing efficiencies and lower overhead costs, which led Duracell to achieve its goal of “industry-leading” margins, said the company.

Heightened promotional and give-away activity by high-end alkaline competition, and aggressive promotion and increased distribution of low-priced, low-performance zinc batteries, continued to negatively impact the category, said Duracell. Duracell’s alkaline-battery value share in the United States held steady in the fourth quarter and year, according to the battery maker.

Consolidated Gillette sales in the fourth quarter grew 19 percent to $3.1 billion from a year-ago $2.6 billion, while net income in the three months reached $415 million, compared with $368 million.

For the 12 months, sales climbed 13 percent to $10.5 billion from $9.3 billion, while net income rose 22 percent to $1.7 billion from $1.4 billion.